China’s LeTV To Invest $775 Million in Hong Kong Expansion

Hong Kong

LeTV, one of China’s top online video platforms, has announced plans to expand from mainland China into the Hong Kong video entertainment market. The company said that it will invest up to HK$6 billion (US$775 million) in the development.

The company said that it would offer an extensive array of video content. It reported that it has struck TV content supply deals with companies including the BBC and Sanlih Entertainment Television. It said that it had acquired movie rights from Chinese language companies including Golden Scene, Pegasus, China Star Entertainment, Celestial Movies, Orange Sky Golden Harvest, Fortune Star Entertainment and My Way Film.

“Letv is also in keen discussions with major Hollywood studios to purchase copyright of their films and TV dramas,” the company said in a statement. “Additionally, Letv is currently advancing a scheme for local drama production in Hong Kong, with a plan to shoot five Hong Kong dramas that cater to local audience preferences.”

The company said that it will also set up a customer service and hotline center operation, and e-commerce operation.

China’s online video platforms have become powerful players in the fast growing mainland Chinese industry where they act as ancillary distributor, pre-release marketing partner and increasingly film investor and producer.

LeTV’s LeVision unit has been an active investor. It was a producer on “Expendables 3” and was investor and distributor of the youth driven “Tiny Times’ franchise.

While several of the platforms have hinted at expansion throughout Greater China and the rest of Asia, LeTV’s announcement of a move into Hong Kong is one of the most concrete steps in that direction.

It comes at a time when Hong Kong, which operates a separate legal and governance system from the People’s Republic of China, is undergoing a period of turbulence across many of its media sectors, with issues ranging from corporate collapse, the role of government, and encroachments on the freedom of the press, which are enshrined in Hong Kong law.

The issuing of new free-to-air licenses and troubles for the territory’s established broadcasters has proved particularly controversial. The government awarded licenses to companies seen as pro-establishment but denied a permit to Hong Kong Television, a company formed by telecoms maverick Ricky Wong which had spent millions on program production in anticipation of receiving a license. When the company was further told that it would not be allowed to broadcast via the Internet it instead became an independent producer.

This was played out against the protracted and farcical meltdown of number two free-to-air group Asia Television (ATV) and the recent arrival of China Media Capital as the first mainland Chinese investor in an influential, boardroom position in dominant free-to-air group, Television Broadcasts (TVB).
LeTV says that it understands the dynamics of the Hong Kong market and the preferences of Hong Kong audiences, who are highly mobile and are less willing than ever to be tied to traditional broadcast schedules.

“The results [of a recent survey in Hong Kong] show that an era of Internet television is on the rise, where Internet TV and VoD will become prevalent among audiences, and viewership of live TV broadcast will begin to dwindle,” said LeTV in a statement.

Crossover between broadcasting, Internet TV and e-commerce also appears to be high on the company’s agenda. “Customers purchasing the Letv Super TV X50 Air model and its subscription plan can redeem HK$500 by bringing an antenna with them to the store where they make the purchase,” the company said.

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